Revolutionizing Music Making with Stems and Community

In February 2022, 13 musicians and 7 visual artists from all over the world remixed dear, a record that I put out last year with one of my best friends Andros. The record, which we originally intended for traditional streaming platforms, was being remixed by members of the StemsDAO community for our first ever web3 music remix game. In just a few weeks, the remixes have already garnered over 50,000 streams on Spotify and our community has grown to over 500 active Discord members and over 1000 Twitter followers. In our second game we received 18 remixes and currently we are in the middle of our third community game with the legendary producer Great Dane.

The games have illuminated the power of music to bring creative minds together. Our goal was to create a collaborative experience where members of the community use a song's stems to create new art, connect as artists, and enjoy the art as a community. The entire experience proved that by leveraging novel web3 technologies, the process of making music can become more creative, communal and collaborative. The genesis remix game serves as a proof of concept for what we are building at StemsDAO and a confirmation that the community is headed in the right direction.

StemsDAO is a community and collaborative platform where artists drop collections of stems, samples and songs as NFTs with a game around the drop to incentivize the making of new art.

How did we decide to build a collaborative music NFT platform? This article is about my personal journey into the emerging frontier of web3 music and discovering my place in the space.

Background

My name is radniik - I am a multi genre music producer and DJ. Since 2018 I have been producing electronic music and DJing across the US from New York to LA. My music production style is influenced by many genres - electronic, hip hop, indie, industrial metal. Additionally, I have been a longtime crypto enthusiast and have a background in software engineering. In 2021, the explosion of web3 and non-fungible tokens (NFTs) gave me an opportunity to explore the intersection of music and web3.

In web3, applications are decentralized and community-governed by its builders and users, instead of having the user's data be owned by monolithic companies like Facebook or Google (the web2 model). Ownership and governance is powered through tokens, both fungible and non-fungible (NFTs), which are recorded and verified using blockchains. NFTs allow users to own and trade any sort of digital object, which caught my eye because music has a notoriously long-standing issue with ownership.

On the surface, NFTs seem to be digital images (JPEGS) of ridiculous apes and punks, priced in the millions, and inaccessible to most. The best selling NFT collections are mere status symbols, serving as profile pictures (PFPs) on social networks as the equivalent of a digital Rolex. Yet, there is a deeper utility to owning NFTs. By owning a certain NFT, you’re granted access to exclusive events both in the physical world and the metaverse, bringing you together with other owners. Thus, NFT’s are a vehicle for building community.

Once I understood the power of NFTs – to establish ownership and build community – I started ideating on how to apply these ideas to the music space. What was the full potential of music NFTs?

Cutting out the Middleman

Since Web3 is decentralized, bad acting middlemen can easily be cut out. In Decentralized Finance (DeFi) the middlemen are financial institutions. In music, it's the greedy and outdated music labels, or Digital Streaming Platforms (DSPs) like Spotify, which have a low and inconsistent pay-per-stream model.

Before the internet, record labels were crucial to an artist’s success by helping with development and distribution. These days, music labels are the problem. There is a slim margin of revenue that makes it to musicians. Out of $20+ billion total revenue per year: 88% goes to the big 3 labels – Universal Music Group, Sony Music Entertainment, and Warner Music Group – not the artist.

Labels often push an artist into the modern equivalent of indentured servitude via advances. An advance is money given upfront to fund artists in executing an album, where the loan is expected to be paid back in full. By giving an artist an advance, a label has immense control over the career of an artist until the debt is paid. Labels determine the release schedule of artists, dictate creative decisions, and overall prevent innovation. Extreme deals, like the 360 deal, have gone as far as controlling artists through their lifetime, even to their death, as was the case for David Bowie and Prince.

DSPs have revolutionized music distribution with no advantage to the artist. They are a black box in terms of royalty payments, where payment-per-stream is inconsistent and streaming payments are unreliable, coming 2-3 months late. With the top 10% of artists generating 99.4% of the streams on Spotify, most artists find it impossible to make a sustainable living off streaming payments alone. Coupled with labels seizing most of the streaming revenue for themselves, even the artists at the top make only a fraction of what their art is worth.

Additionally, like most of web2, Spotify has pivoted to an ad-based business model since most of their users are non-paying subscribers on the free tier (which means they are the product). Spotify, which brands itself as a mix of an algorithmic and social music discovery engine, is actually heavily influenced by the advertising dollars of major labels. The influence of advertising has serious implications for artists - their success is not solely based on which artist has the best sound, but by who has the most money behind them.

So what would cutting out the middleman in music actually mean?

With no labels or DSP’s, the main players are the artists and their fans. In this ideal world, the more fans enjoy an artist's music, the more the artist is proportionally rewarded.  What's more, removing the middleman has the potential to open up a direct line of communication between artist and fan. So when an artist is rewarded, they can look to their biggest fans to reward them back for their loyalty and investment.

Here are some other ways:

For Artists:

• Know who their early and hardcore fans are: “early fans + stans”
• Community: can interact directly with super fans, investors, NFT speculators
• Sell royalties
• Higher revenue

For Fans:

• Proof of fandom/bragging rights thats recorded on-chain (one of X artists first 50 fans, very important for hardcore music heads)
• Being able to seed invest in artists early
• Patreon style perks  such as premium content, merch, community benefits
• Ticketing access to shows, private events, and festivals
• ​​Belonging to a community of music makers could inspire the jump to become musicians themselves (blurring line between consumers and creators)
• Owning cool art

Desire to Build An Artist-Fan Relationship

Initially after releasing “dear”, Andros and I were happy with the song’s success: it got on playlists, had a high save rate and even triggered Spotify’s recommendation algorithm. While we saw general statistics about our audience, we had no idea who they were. We couldn’t reach out to them and express our appreciation for their support or reward them with free pop up concert tickets or cool merch. We had no way to build an artist-fan relationship.

Andros and I are smaller scale artists, so every fan is important to us. Recognizing the potential of NFT collections to give ownership to early supporters and build community, we began playing around with the idea of turning “dear” into an NFT collection in the fall of 2021.

The landscape of music NFTs at the time consisted mostly of single song or album NFTs. Established artists could leverage their pre-existing fanbase to sell NFTs at unfathomable prices. 3lau, for example, sold his album for $11.6 million in under 24 hours. Even smaller, independent artists saw incredible success such as Daniel Allan, who was able to crowdfund 50 ETH ($140k at the time) to make his Overstimulated EP by rewarding collectors with 50% of his future master royalties. Yet, the limitations of NFTs as collectibles that fade in value overtime (despite a continuously growing NFT market) did not exempt single song and album NFTs. Artists who did not engage with their holders may have sold out their collections initially, but did not have much success with secondary sales. Once the initial hype of a collection faded, the utility of owning a single song or album music NFT was very unclear.

To try something completely new, we decided to fractionalize “dear” into its stem layers (main vocals, background vocals, drums, lead synth, bass, ambience, chimes, palm guitar). Each NFT would stand on its own as a unique piece of art. Owning a stem NFT would represent partial ownership of “dear,” and an early investment in our music careers. If anyone bought into our idea, we hoped to reward those fans, who would be easy to find since NFT purchases must be made on the blockchain.

With minimal expectations, we set up a Discord and invited our friends and music enthusiasts to work on our idea. People showed interest immediately. Musicians, graphic designers and audio engineers from out of our circle were joining and inviting others. Many artists voiced wanting to drop their own collections of stems. In a few weeks, we’d built an active community over a seemingly simple idea of fractionalizing a song into its stems. A vision of a musical collective that was communally owned by its contributors emerged.

We became StemsDAO, a decentralized autonomous organization (DAO) that would serve as a community and platform where artists could drop collections of stems as NFTs. What we know now that we didn’t know then is that the utility of stem NFTs go beyond that of just ownership: stem NFTs can be utilized for further music creation and collaboration.

Why Stem NFTs work

Almost all music you’ve ever heard reuses a stem or sample from prior work. Stems of songs are naturally composable meaning they can be plugged on top of one another and remixed into something new. In web2, producers can download samples from large online libraries, such as Splice but when a new song is created, there is no way to connect it to the original artist or others who have used the same sample. Legally sampling a sound from a label-backed release is difficult enough, requiring two separate licenses (from the label and publisher), that most artists don’t even bother or sample illegally. In web3 however, we are able to fully track where a sample is used and properly reward the original artist.

Music makers are in desperate need of a web3 native version of stem management for their projects.

The ability to track how a stem is reused is extremely powerful because there are highly influential communities that heavily rely on repurposing stems to make new music, where the original artist is never rewarded.

We are building StemsDAO for these communities.

Remix Culture and Fan-made Music

DJ remix culture is the epitome of music composability. DJs often remix well-known songs in their own style, allowing the crowd to chant the song's lyrics while the DJ showcases their unique sound. Looping elements of multiple songs and mixing them together to create something new is also a common practice among the best DJs. Even the ordering of songs in a DJ set is intentional and its own work of art, as it creates a progression or narrative that takes the listener on a unique journey.

While DJ culture leads to amazing new works of art, it often falls short in rewarding the original artists whose songs a DJ may use, whether at a show or in unofficial remixes. Future on-chain tracking of stem usage can help fix these concerns.

From the music production side, electronic music producers sometimes host remix competitions by releasing their song’s stems. The best remixes are chosen and released in a remix album where both the original artist and remixers are given credit. Remix competitions demonstrate an amazing blueprint for music composability but unfortunately are very rare. Most music is not available to be remixed legally, even though the benefits are clear: remixes can completely revive a song by reimagining it. For example the 1983 cult classic “Blue Monday” by English rock band New Order was remixed in a completely new way in 2020 by trance trio Above and Beyond already amassed over 10 million streams.

Many fans create their own fan-made music for the love of the artist which they share on the internet without being able to monetize. Famous songs are reimagined in different production styles from lofi to drill. Even though there is so much beautiful fan-made music being made, it is hard to properly reward remixers and original artists without tracking the use of the stems.

Building a platform like StemDAO strengthens the entire life cycle of remixing: artists are properly rewarded for their music when reused, further incentivizing them to release their stems, and subsequently allowing more remixing (or creation of new art) to occur than in web2.

Fan-made Music

Fan-made music is a modern phenomena where die hard fans make remixes for their love of the artist. Whereas in DJ culture, the original artist is not rewarded and the remixer is, in fan-made music the reverse is true because

While DJs and established producers generally make a profit from their remixes, die hard fans who engage in the modern phenomena of fan-made music, remix for their love of the artist. Fan-made music lives on Youtube but is unable to be monetized by the remixer.

Snippet Culture

One notable aspect of fan-made work, primarily in hip hop, is snippet culture. Snippets of an unreleased song are often deliberately leaked online or played by an artist over Instagram Live to generate hype for an upcoming release. Fans are eager to hear the rest of the song which adds extra excitement to the music releasing process.

Leaked snippets are incomplete so there is natural room for fans to build something new based off the snippet. Snippets also have an air of mystery which further draws in fans. An artist like Kanye West has thousands of fan-edited songs and hundreds of fan-edited albums both from official  releases as well as leaks.

Arguably, no artist has leveraged leak culture and created his own DIY community better than Playboi Carti. For years he delayed the release of his album “Whole Lotta Red” and teased his fanbase by only offering cryptic messages on social media and snippet leaks which fueled constant online speculation about when the album would actually drop. Impatience for the album’s release led to countless fully mixed and mastered fan-made songs that were often complemented by visuals that matched the aesthetic of Playboi Carti.

In general - snippets excite an artist’s fanbase and inspire them to make full fledged songs. Snippet culture demonstrates a gamified experience that can happen when an artist releases music in a composable format. Snippet culture highlights a music making relationship between artist and fan but is unable to financially reward each group.

Snippet culture shows that creating games and mystery around a musical release can add excitement, and more artist-fan collaboration. TikTok has expanded on snippet culture through their Duet feature which has allowed artists to directly collaborate with their community. Whether it be hip hop artists like Russ who hosts an open verse challenge where fans can add in their own verse or producers like Charlie Puth, who posts beats for others to sing over, TikTok has created an interactive back and forth between artist and fans.

Stem Games

We want to make the process of rolling out music more rewarding, interactive, and innovative on the StemsDAO platform:

• Rewarding: artists and fans properly rewarded for their work
• Interactive: artists and their communities are directly connected with no middlemen in the DAO
• Innovative: gamification of remixes incentivizes greater creativity

How do we maximize excitement around the remix games beyond normal gamification?
Incentivizing the fans with:

• Exclusive access to stems from unreleased work of their favorite artist
• Artist involvement during the creative process from beginning to end. Learn about their music making process as a peer (which blurs lines between artist and fans)
• Unique prizes: release an official remix with the artist, win studio sessions with the artist, having the artist play a winning remix live etc.
• Fun gamification - leaderboards, intermediate prizes, betting on who will win the competition etc.
• Community experience: get closer with your favorite artist and the other member of the community

Incentives

The backbone of Stems Games are incentives that properly reward both original artists and remixers, ensuring that everyone always comes back.

Without web3, there are of course clear issues with fan-made art. It’s a two-sided problem - the original artists are not compensated for their work, and the fans are disconnected from the process. Both sides are not properly incentivized: neither the original artist nor secondary artist is rewarded.

Tracking how stems are used allows us to apply an incentivization model to music communities that are already building on top of an artist's work for free, as evidenced by fan-made remixes and snippet culture. Adding incentives for both sides allows a micro economy to be stimulated between an artist and their community.

Artists who release their stems or remixes on the Stems platform get rewarded with $STEM tokens, which gives partial ownership of StemsDAO. Those who have ownership of the DAO are able to drive the creative direction of the community and platform and help curate the vibe and art.

Proper incentives will allow more people to be paid for making music in a way that was not possible before which in turn would lead to a huge surge in new music creation. More music will bring in more collectors and investors to stimulate the economy around the music. In the future, speculators will even be able to bet on who they think will make the best remix during a competition.

These ideas lead to our first competition….

Dear remix competition

Our first incentivized game revolved around the stems of “dear”. We announced two prizes: 1 ETH for the best remix and 1 ETH for the best visualizer of the original song, both of which would be voted on by the community.

Remixes were submitted from all over the world in all sorts of different genres including from a Grammy-winning producer. Music composability was on full display. Musicians even made remixes of remixes and visual artists made visualizers of these remixes of remixes, a far derivative of the original song. It was incredible for Andros and I to hear how our work could be reimagined in new ways.

As the game progressed, artists participating also voiced the idea of splitting the prize. Participants expressed their respect for other submissions coming from all over the world and that for many, even 0.1 ETH would be significant for their music careers. The game began to evolve organically

After a community vote, it was agreed that the original winning prize would be broken up into 10 prizes (5 for remixes, 5 for visualizers)

The 5 prizes were as follows:
Winner (x1) = 0.5 eth
Runner Up (x1) = 0.2 eth
Honorable Mentions (x3) = 0.1 eth

Once the remix competition closed and the voting began on our Discord, another interesting thing happened: voting armies. Dozens of new members flooded our Discord server to vote, overwhelming the voices of the original community members. Because of the presence of voting armies, many remixers and OG community members voiced their concern that the Discord votes were not reflecting the community preference and there were hundreds of messages debating the best methodology to decide the winners.

Eventually, with community input, the highest contributing Stems members (named virtuouso’s) decided on:
40% - 2 votes from the original artists (Andros and I)]
40% - 6 votes from OG community members + 13 votes from artists (excluding og artists)
20% - 108 community votes (excluding og artists + community members)

Weighing the points from each group accordingly led to our first cohort of StemHeads and a beautiful remix album.

We also made a point to not completely vilify existing DSPs. Through this process we learned that building an artist’s presence in web2 and web3 can be symbiotic - the StemsDAO dear remix album already has 50k+ streams on Spotify in only a couple of weeks. IP that was originally created for web2 DSPs was remixed by a web3 community and the artists involved all boosted their web2 and web3 presence while collaboratively making new music.

Overall the remix competition blew away all our expectations and ended up proving two things:

(1) Music is composable and collaborative. Stems are lego blocks that promote greater creativity

(2) DAOs activate a community by adequately rewarding artists for their work and members for their participation

Conclusions

Although I have learned a lot in the past year, the StemsDAO journey into music NFTs has just begun. I feel blessed to be a part of this space and can't wait to watch it evolve.

There is nowhere I would rather be than at the forefront of the democratization of music.

Releasing the music on-chain gives us so much flexibility and allows us to track how parts of a song are being used. In the past, Intellectual Property (IP) and copyright law around samples were designed to box out remixers from the music industry.

Our next step will be releasing the Stems platform which will have all the NFTs as well as continuing to run further community games based on what the community wants.

We will warmly bring in more people into our community, and reward them for making good music. By embodying culture in a decentralized way we plan to revolutionize the process and culture of music making

Join us in our Discord and on Twitter!

-radniik

Special thanks to article contributors: Rika Ichinose, Haitham El Mengad, Polina Bondarenko